Inclusive non-market valuation in Coupled Human and Natural Systems (CHANS): a motivating theory

Abstract:

Selectively focusing non-market valuation studies for operational changes in singular stretches or components of complex, coupled human and natural systems (CHANS) ignores important social and cultural dimensions of value. If economists pursue measurement of non-market values in CHANS, then an inclusive approach is required that is not biased towards one value frame (e.g. environmental amenities in one stretch or area) in contested, multi-dimensional policy domains. Ignoring social and cultural value dimensions, or environmental effects or trade-offs in other areas or dimensions, can lead to biased willingness to pay estimates for proposed operational changes, biased benefit-cost analyses, and hence misinformed or inefficient policy outcomes. This analysis provides a conceptual approach for elicitation of non-market values in CHANS using hydroelectric dams on interconnected river systems as an archetypical coupled system. A motivating theory for CHANS valuation and how it compares to traditional, singular measurements of environmental and resource values is provided. Lessons learned from the hydropower context are generalisable to other CHANS where contested environmental, social and cultural dimensions of value exist. This work has important policy implications for measuring a broader, more inclusive range of non-market values and public preferences.